The Definitive Investment Quality Measure

An Intuitive True Total Risk-Adjusted Performance Measure and Characteristics Matrix

How can anyone really know how to determine a good investment? People—including the overwhelming majority of financial advisors—are quick to resort to stories, demonstrably misguided heuristics, and arbitrary ancillary qualitative considerations in attempts to determine the quality of an investment, but these considerations are highly subjective and have proven time and again to be grossly unreliable, if not completely misleading. No one readily accessible to the public seems to possess any objective, reliable investment standards.

Informed, intellectually honest discourse around investing is sorely lacking. What should be truth-seeking discussion driven by the stewards of the financial services industry and greater investment community is better characterized as preaching of religious dogma driven by purely tribal associations and ultimately flight from cognitive dissonance: FINRA-licensed financial advisors champion publicly-traded securities; life insurance agents champion annuities; Realtors champion real estate, private equity firms champion private equity, etc.

There’s a well-established but grossly underutilized academic field that has solved the problem of how to determine good investments across all asset classes with objective precision: quantitative finance.

To be clear, quantitative finance does not mean technical analysis, portfolio analysis, fundamental analysis, security analysis, top-down, bottom-up, or any other customary, incomplete form. Quantitative finance is simply the rigorous application of mathematics to investment analysis that when properly utilized consolidates all the traditional methods. It can and should be applied to public and private assets alike. It provides the means to compare any investments in apples to apples terms…